Amazon’s taxing reach

Amazon.com Inc. will begin to collect sales tax from customers in Wisconsin on Nov. 1, when the retailer opens its first distribution center in the state, state officials say. When that occurs, Amazon will be collecting sales tax in 14 states where 48.5% of the U.S. population resides.

The distribution center, in the southeastern Wisconsin city of Kenosha, will constitute Amazon’s first physical presence in the state, requiring it to collect sales tax. Under federal law, states can require online and catalog retailers to collect sales tax if they have an in-state physical presence, such as distribution centers or stores. Wisconsin will become the 14th state where Amazon, No. 1 in the Internet Retailer Top 500, collects sales tax.

The 14 states had a total population of 152.4 million in July 2012, or 48.5% of the country’s total population of 313.9 million at that time, according to the U.S. Census Bureau.

Amazon has informed the Wisconsin Department of Revenue that it will obtain a seller’s permit and begin collecting sales tax on sales to Wisconsin residents on Nov. 1, while also beginning to file sales tax returns and remitting sales tax revenue to the state, a spokeswoman for the state revenue department says. Amazon didn’t immediately return a call for comment.

The state revenue department estimates that Amazon’s collecting sales tax in Wisconsin will result in an increase in state sales tax revenue of about $30 million per year starting next month, the spokeswoman says.

The other 13 states where Amazon already collects sales tax, according to a list on the retailer’s web site, are: